As one of the SBN or Government Securities, the popularity of bond investment is not as busy as stocks and deposit investments. However, that does not mean that this type of investment is not in demand, you know. Even now, the Government of Indonesia has routinely issued SBNs of this type of Bond. Meanwhile, the bonds issued by the government are indeed the tradable type retail SBN which are intended to be purchased by the wider community.
The bonds themselves are generally Government Securities (SUN) from the issuer of the bond to the party holding the bond along with a promise to pay the principal and interest at the maturity date of the payment. There are many parties who issue bonds, for example, the government, which issues government bonds in the national currency or uses foreign currency, or it can be government agencies and private companies.
Before starting bond investing, you should first know the ins and outs of understanding bonds. Starting from what bonds are, the benefits, the types, where the bonds are issued, how to do it, to the characteristics of the bonds themselves.
What Are Bonds?
Bonds are government bonds issued by government entities or companies with a certain period of time. By having bonds, it means that the country or company owes you the amount promised with the agreed maturity date.
In addition, the debtor (in this case the country or company) will pay interest or coupons to you every month. Bond investment is also a safe and reliable type of investment.
1. Nominal Value
In bonds, there is something called face value. The nominal value is the value of the principal debt that must be paid by the bond issuer at maturity. Usually this value is listed on the bond sheet.
The issuer must explain and state the amount of funds needed, otherwise known as the amount of bond issuance. The determination of the amount of funds is based on cash flow, the size of the issuer’s needs, and business performance.
2. Maturity Period
The maturity period for bonds ranges from 1 year to 10 years. Usually the maturity of the bonds is at least 5 years. However, there are also bonds with maturities of 10 years, 15 years, even 30 years.
Most lenders prefer short-term to long-term bond investments. This is because it is considered that short-term bond investments have a lower level of risk.
3. Company Asset Claims and Income Claims
If at any time the issuer goes bankrupt and defaults on, the only liability that can be done is to sell the assets / assets of the issuer. After that, give the proceeds from the sale to you as the bond holder.
Claims against assets, that is, you will get a claim to take precedence when an asset is sold. While claims against company income, it means that you as a bondholder have the right to claim precedence over other dividends.
4. Coupon Rate
In bond investing, you will get coupons periodically at the time specified by the issuer. The coupons here are the same as the flowers you will get. The time of giving coupons can be every 1 month, 3 months, 6 months, even 1 year.
It depends on the agreement between you and the bond issuer Usually, the coupon amount is determined at the beginning of the bond agreement. With this coupon, the concept is the same as the return you get when funding .
The yield on KoinRobo, has also been predicted before, which is between 4% and 13% per year. Of course, at KoinRobo the longer the period you choose to fund, the bigger the return. Not only that, by funding on KoinRobo you also contribute socially, you know.
5. Indenture (Contract)
In bond investment, there is an indenture or contract between the bond issuer and the bondholder’s representative (trustee). This contract contains the rights and obligations of the issuer and bondholder.
The bond contract also contains terms and limits designed to protect you (as a bondholder). Such as prohibitions on the purchase or sale of fixed assets of the company, prohibitions on the sale of company receivables, restrictions on withdrawal of additional loans, and limits on dividend payments.
6. Current Yield
Current Yield is the gain from the coupon (interest) you receive for one year against the bond price. It can be said, that the current yield is calculated based on the annual interest on the bond price, the result will be a percentage (%). There is another thing called Yield to Maturity, which is the rate of return you will get if you hold the bond until maturity.